Views of Angel Broking:
In what could be a sentimental boost to Reliance Communication, the National Company Law Tribunal (NCLT) has admitted the petition for merger of the wireless business of RCOM with Aircel. Additionally, NCLT has also admitted the petition for RCOM to sell 51% stake in its Towers business to Brookfield of Canada.
As part of this deal with Aircel, the debt of RCOM will stand reduced by Rs.14,000 crore. In addition, the sale of the towers business to Brookfield will help RCOM raise another Rs.11,000 crore. Thus, out of the company's total debt of Rs.45,000 crore, nearly Rs.25,000 crore (60%) will get defrayed as a result of these two deals. It may be recollected that, earlier this year, RCOM had sought more time from its creditors and had sought a deadline of 30th September to complete the merger with Aircel and the sale of the towers business to Brookfield.
Apart from avoiding being classified as an IBC account, this will also help RCOM to reduce its debt substantially and also save on debt servicing costs. After 3 consecutive quarters of losses, the debt reduction should help RCOM improves its profit performance once the deal goes through!
Shares of RELIANCE COMMUNICATIONS LTD. was last trading in BSE at Rs.24.1 as compared to the previous close of Rs. 20.75. The total number of shares traded during the day was 9057331 in over 13005 trades.
The stock hit an intraday high of Rs. 24.65 and intraday low of 20.1. The net turnover during the day was Rs. 209776822.